Car sales in India continued to rise last month with the diesel market showing more growth.

Market leader Maruti Suzuki increased its domestic sales 7% year-on-year with strong demand for its Swift and Dzire cars although it has now run out of stock due to the suspension of production at its two Manesar plants.

Hyundai, Tata, Mahindra & Mahindra and Toyota also increased sales although there were falls at GM, Ford and Honda.

Hyundai, number two in the market, rose 7.6% in July, boosted by the i20 hatchback and Verna sedan, although the company expects the industry growth rate to remain low with the market suppressed by inflation, high fuel prices and interest rates.

Analysts believe that a potential indefinite lockout at Maruti's Manesar plants, following the massive violence that led to the death of a manager last month, will impact the overall car market during August, benefitting rival carmakers.

The company has informed its dealers of the non-availability of the popular Swift and Dzire cars, but has not stopped taking orders.

During July, Dzire sales increased three-fold to 11,413 units while the compact segment of Swift, Estilo and Ritz grew 73% to 9,099 units. Sales of the entry-level M800, Alto and Wagon R, however, dropped 24% to 28,998 units as demand for petrol-powered cars continued to slip.

Sales of cars and SUVs at Tata surged 53% as the company benefited from a strong line-up of diesel vehicles, which are currently driving demand. M&M reported a 27% jump in passenger vehicle sales.